Managed Care Organisations | 25 Jun 2024

Source: TH

Why in News?

Recently, a prominent healthcare chain in South India announced its venture into comprehensive health insurance, integrating insurance and healthcare provision functions under one roof, mirroring a managed care organisation (MCO).

• In a related development, an International Labour Organization (ILO) paper has also revealed that achieving universal social protection for low- and middle-income countries would necessitate an additional USD 1.4 trillion per year.

What is the Background of Managed Care Organizations(MCOs)?

• About:
  • An MCO is a healthcare provider whose goal is to provide appropriate, cost-effective medical treatment.
  • MCOs in the US evolved from early 20th-century prepaid healthcare practices.
  • Mainstreaming in the 1970s: The combination of insurance and service functions arose to manage costs, focusing on prevention, early management, and cost control with fixed premiums.
  • Evolution: MCOs have diversified and penetrated deeply into the health insurance space, although robust evidence of their impact on health outcomes and preventive care is limited. They have, however, helped reduce costly hospitalisations and associated expenses.
• Development in India: Since the 1980s, India's health insurance has focused on indemnity insurance and covering hospitalisation costs, despite a large market for outpatient consultations.

What are the Challenges to MCO in India?

• Limited Reach: MCOs in India primarily target the affluent, urban population as health insurance market is skewed towards urban areas. This neglects the vast rural demographics and hinders efforts towards Universal Health Coverage (UHC).
• Informal Outpatient Care: A significant portion of healthcare in India occurs in informal outpatient settings. This lack of standardisation and regulation makes it difficult for MCOs to integrate and manage care effectively.
• Absent Standard Protocols: The widespread absence of widely accepted clinical protocols across healthcare providers creates inconsistency and reduces the quality control MCOs rely on.
• Economic Unsustainability: High operational costs and resulting unaffordable premiums for MCO plans create a financial hurdle. This discourages participation and hinders long-term viability.
• Lack of Incentives for Cost Control: The current health insurance model in India hasn't fostered a culture of consumer-driven cost control, a core principle of MCOs.

What are the Steps Needed to Develop MCOs in India?

• Focus on Rural Outreach: Partner with government initiatives like Ayushman Bharat to expand coverage and leverage existing rural healthcare infrastructure. This aligns with the National Health Policy 2017's push for UHC.
• Standardisation and Regulation: Advocate for the development and implementation of standardised clinical protocols across outpatient settings. Collaborate with the National Health Authority (NHA) for accreditation and quality control mechanisms.
• Technology and Innovation: Utilise technology to streamline processes, reduce administrative costs, and offer telemedicine services to bridge the rural-urban gap. This aligns with recommendations from the Committee on Affordable Healthcare for All.
• Value-Based Pricing: Implement value-based pricing models that reward quality care and efficient service delivery. This incentivises cost control and aligns with suggestions from NITI Aayog.
• Public-Private Partnerships: Foster public-private partnerships (PPPs) to leverage government resources and private sector expertise for broader reach and improved infrastructure.
• Data-Driven Decision-Making: Encourage data collection and analysis to track healthcare trends, identify cost-effective treatment options, and improve service delivery across MCO networks. This aligns with the vision of the National Digital Health Mission (NDHM).

Conclusion

Universal health coverage is a complex challenge that requires multifaceted solutions. Managed Care Organizations (MCOs) can significantly contribute to India's healthcare landscape. By fostering public support and gradually implementing MCOs, along with adopting comprehensive financial strategies, India can make substantial progress toward achieving universal health care.